KNOXVILLE NEWS SENTINEL

Legislative committee studies hike in insurance premiums

By Associated Press

October 27, 2003

NASHVILLE - Steve Williams has no doubt about why medical malpractice insurance is getting more expensive in Tennessee: lawsuits.

"It's completely and totally related to claims and claim-related expenses," said Williams, chief executive of State Volunteer Mutual Insurance Co., Tennessee's largest underwriter for doctors. "It is not anything else. It is not the stock market, it's not corporate overhead."

But some lawmakers on a committee formed to study the issue this past summer say it's more complicated than that.

Attorney Rob Briley, a Nashville Democrat who was the committee's co-chairman, said the state's Administrative Office of the Courts had no record of how many medical malpractice awards there had been in recent years.

They went back through cases to see which ones fit the bill and found seven awards for the plaintiff in medical malpractice cases since 1997.

"That kind of debunks the theory of out-of-control jury awards driving up the premiums," Briley said. "We don't do as good a job as we could in collecting information about jury awards in this state. That's basically what we learned."

About the only thing all sides agree on is that insurance premiums are going up. It's not unique to Tennessee, but premiums at State Volunteer Mutual have increased by 17.3 percent, 15.1 percent and 16.3 percent the past three years.

Doctors and insurance companies are pushing the Legislature to do something to curb rising costs. Without some relief, they say, medical services will be cut back as doctors opt out of areas - both geographic and medical - with the highest insurance costs.

"We don't want to overstate the situation," said Scott Smith of the Tennessee Medical Association. "However, we've seen instances already where physicians are cutting back on the services they're providing, and that unfortunately will impact a lot of people out there."

Doctors want the Legislature to cap the amount of money that can be awarded for non-economic damages in malpractice cases. The most frequently used figure is $250,000. They would also like to see the law allow insurance companies to pay large awards over time, instead of in a lump sum.

Damage awards come in two categories:

Economic, for things like the cost of medical care and lost wages. Those can be substantial if a person needs a service or medicine for the rest of their life.

Non-economic, which are subjective penalties to cover "pain and suffering."

What does pain cost? What is suffering worth? Medical providers and insurers say they want some stable, predictable way to plan for those costs, and cannot do so as long as juries can award whatever they want.

On the other side of the long-running debate are lawyers, who see damages as the best weapon patients have against medical errors that may leave them damaged for life.

State Sen. Mark Norris, R-Collierville, is the author of five of the 25 bills before the study committee. An attorney, Norris also sees the doctor's side of the issue.

"We're trying to find a balance between people's right to recover damages when they've been wronged, and their right to health care," he says. "Right now the system is out of balance. The right to recover is, I'm afraid, overshadowing the right to care."

If Tennessee does nothing, there will be serious problems in the future, Norris said, because 25 other states have already adopted some sort of reforms.

"I've seen the nature of litigation change. More cases are being filed by out-of-state law firms, lawyers trolling for verdicts," Norris said. "I'm worried that Tennessee is vulnerable."

Tennessee has dealt with this before. In the 1980s it adopted a 33 percent cap on how much attorneys can get from malpractice awards, and some other safeguards. But Norris and others worry the game is changing much too fast.

On the other hand ...

"We haven't been convinced that Tennessee has a problem, nor that there is any action to be taken until we know what the problem is," said Allan Ramsaur, executive director of the Tennessee Bar Association.

"I think it would be a mistake to do something without having some better definition of what we're trying to cure."

If lawmakers stick with their professional associations, the doctors have an uphill battle. There are at least 28 lawyers in the Legislature and just one doctor.